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Dynamic Gains and Market Access Insurance: Another look at the AUSFTA

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Author Info
Richard G. Harris () (Department of Economics, Simon Fraser University)
Peter E. Robertson () (School of Economics, The University of New South Wales)

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Abstract

We use a dynamic computable general equilibrium model to revisit the dynamic benefits of the Australia-USA Free Trade Agreement and, in particular, to evaluate the insurance value of this agreement in the face of regional and global trade wars. The insurance benefits are quantified by comparing the status quo against alternative scenarios where some or all regions raise tariffs by 10 percent, both permanently and temporarily. These insurance gains are found to be as much as four times larger than the traditional status quo efficiency gains.

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File URL: http://wwwdocs.fce.unsw.edu.au/economics/Research/WorkingPapers/2007_23.pdf
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Publisher Info
Paper provided by School of Economics, The University of New South Wales in its series Discussion Papers with number 2007-23.

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Length: 27 pages
Date of creation: Jul 2007
Date of revision:
Handle: RePEc:swe:wpaper:2007-23

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Related research
Keywords: Trade policy Computable General Equilibrium Human Capital Dynamics

Find related papers by JEL classification:
F15 - International Economics - - Trade - - - Economic Integration

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  1. Drusilla K. Brown & Kozo Kiyota & Robert M. Stern, 2005. "Computational Analysis of the U.S FTAs with Central America, Australia, And Morocco," Working Papers 527, Research Seminar in International Economics, University of Michigan. [Downloadable!]
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  2. Brown, Drusilla K., 1987. "Tariffs, the terms of trade, and national product differentiation," Journal of Policy Modeling, Elsevier, vol. 9(3), pages 503-526. [Downloadable!] (restricted)
  3. McKibbin, Warwick J. & Wilcoxen, Peter J., 1998. "The theoretical and empirical structure of the G-Cubed model," Economic Modelling, Elsevier, vol. 16(1), pages 123-148, January. [Downloadable!] (restricted)
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  4. Mahinda Siriwardana, 2006. "Australia's Involvement in Free Trade Agreements: An Economic Evaluation," Global Economic Review, Taylor and Francis Journals, vol. 35(1), pages 3-20, March. [Downloadable!] (restricted)
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